Exchange Rate in Korea
Korea - Exchange Rate
Won slumps as U.S.-China trade war rumbles on
The Korean won has had a rough ride in recent weeks, trading at KRW 1,191 per USD on 16 May, which marked a 4.8% depreciation from the same day a month earlier and an over two-year low against the greenback.
The currency’s woes primarily stem from global events, including China’s announcement on 13 May that it would retaliate against increased U.S. tariffs by raising its own tariffs on USD 60 billion worth of American shipments. The worsening feud between Korea’s two largest trading partners threatens to undermine Korea’s external sector, which will be a concern given that growth fell to a near one-decade low in the first three months of this year. Exacerbating matters, global investors appear to be retreating to traditional safe-haven currencies at the moment, such as the U.S. dollar, which has reduced demand for the won.
Looking ahead and postulating how it could affect future monetary policy, analysts at Nomura commented:
“In coming months, along with [the] recent sharp KRW depreciation, still-high debt growth could prompt the [Bank of Korea (BOK)] to pause its monetary policy easing. Indeed, mortgage loan growth, released on 13 May, rose to 7.1% y-o-y in April from 6.9% in March, suggesting household debt growth still needs time to reach the government target of 5%. We therefore do not expect any change in the policy rate and a dissenting vote at the next meeting on 31 May, while we continue to expect the BOK to cut the policy rate by 25bp to 1.50% in Q4 2019.”
Korean Won Exchange Rate Forecast
Our panel of forecasters see the KRW recovering slightly going forward, backed by strong fundamentals such as low inflation and a healthy current account surplus. The won is seen ending 2019 at 1,125 per USD and 2020 at 1,109 KRW per USD.
Korea - Exchange Rate Data
|Exchange Rate (vs USD)||1,055||1,099||1,173||1,208||1,071|
5 years of economic forecasts for more than 30 economic indicators.
Korea Exchange Rate Chart
Source: Thomson Reuters
|Bond Yield||1.34||1.55 %||Sep 04|
|Exchange Rate||1,208||0.21 %||Sep 04|
|Stock Market||1,989||-0.40 %||Sep 04|
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September 3, 2019
Consumer prices increased 0.2% over the prior month in August, contrasting July’s 0.3% fall.
September 2, 2019
Merchandise exports plunged 13.6% year-on-year in August, sharper than the 11.0% drop recorded in July, totaling USD 44.2 billion in August (July: USD 46.1 billion).
September 2, 2019
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) increased to 49.0 in August from 47.3 in July, but remained below the 50-threshold that separates expansion from contraction in the manufacturing sector. Output, employment and new orders all declined in August.
August 30, 2019
Industrial production year-on-year increased 0.6% in July, contrasting June’s 2.6% fall.
August 30, 2019
At its 30 August monetary policy meeting, the Bank of Korea (BOK) voted to keep the base rate unchanged at 1.50%, as widely anticipated by market analysts.